Tag Archives: real estate in Dickinson North Dakota

How Dickinson Works, And What Is Going To Happen, Part I

When I became an adult, and was living on my own, whatever town or city that I was living in, I tried to figure out what was going on, what was happening, and what were the causes and reasons for what was happening.

Whether it was my hometown, a college town like Gainesville, a city like Tampa, or a mountain destination town like Flagstaff, I took an interest in the nicest, largest homes, the wealthiest neighborhoods, and I wondered who were the people who lived there, what did they do for a living, and how did they make their money?

The people who were able to afford very nice homes, nice automobiles, and enjoyed a high standard of living, I believed that if I could learn some of the things that they had done to become successful, maybe I could copy them or adapt some of the things that they had done, in order to become successful too.

Successful people who won the lottery or inherited a large amount of money from their relatives, you obviously can’t just copy that.  Medical doctors who became wealthy as they got older, most people aren’t able to become a doctor in the first place.  Wealthy real estate brokers, insurance company owners, car dealership owners, manufacturing company owners, and other business owners, these people caused me to wonder how they got started.

When I had the chance to talk to and get to know wealthy, successful business owners, it turned out that their success had a lot to do with being in the right place, at the right time, with the right idea, and a willingness to take risks at that time.  There was some “dumb luck”, or “blind luck”, but these people also had an understanding or belief that their idea would work at that particular time and place, that came from their understanding of what was going on in the World, and the place that they were.

What I am trying to explain, is that if you want to be successful, you first have to understand where you are, what is going on, and what is happening where you are.  You, the reader, are probably thinking that I am pointing out the obvious, thinking, “Of course people try to understand what is happening around them.”  But, no, they don’t, not really.  Most people just get an impression or idea in their head, and that is their conclusion.  They don’t think any further, to test, challenge, examine, or validate their conclusions.

In Dickinson, North Dakota, where I am currently living, most of the people here form their opinion about reality from listening to their neighbors, friends, relatives, local politicians, community leaders, and Chamber of Commerce; from watching television news stations out of Bismarck and Fargo; from reading the Bismarck Tribune or Dickinson Press newspaper; or from what they see on Facebook or hear on the radio.  These sources that I just mentioned are O.K. to get information from, but the impression that local people get from these sources, is their conclusion, they don’t think any further to examine, analyze, test, check, or question their immediate conclusions.

Concerning Dickinson, what the newscasters in Bismarck or Fargo said on the nightly news, what nationwide newscasters said, what local politicians, community leaders, company owners, business managers, and Chamber of Commerce representatives said in newspaper, radio, or television interviews, when their statements didn’t seem to match what was actually happening in Dickinson, I was angry about it, because people in Dickinson formed their understanding of reality and made their life decisions based on incorrect information that was being reported, written, said, and spread.

Questioning what newscasters in Bismarck, Fargo, or New York said about Dickinson, had they ever even been to Dickinson?  It turns out, that most news reporters and writers for television, radio, newspapers, magazines, and journals were getting their information from local politicians, community leaders, company owners, business managers, and Chamber of Commerce representatives, a group of people who can’t or won’t ever say anything other than positive outlook statements.

The following misinformation was reported so often and repeated so often that most of the people in Dickinson still to this day, think that this is reality:  One, “This oil boom is going to last for the next twenty years.” and Two, “Everyone working in the oil field is making $100,000 per year.”

The oil boom in North Dakota lasted from 2007 through 2015.  This oil boom began once the price of oil was over $100 per barrel, it became profitable to extract North Dakota oil through the process of hydraulic fracturing.  Once the price of oil dropped below $50 per barrel in 2015, it was no longer profitable for oil companies to drill and use hydraulic fracturing to produce oil.

The number of operating oil drill rigs in North Dakota went from over 200, to less than 50 currently.  From 2015 through the present, residents in Dickinson still express the belief, “It’s going to come back.” and “It’s starting to pick back up again.”  In the history of the World, there has never been an oil boom that lasted more than ten years in one place, but the people in Dickinson do not believe this reality.

One of the largest oil companies operating in the Dickinson area, is Whiting Petroleum.  The stock price of Whiting Petroleum reached an all-time high of $370 per share in 2014.  Last week, Whiting Petroleum stock was trading at $1.28 per share.  In the past year, Whiting Petroleum laid off one-third of its workforce in order to cut costs.

Many people in Dickinson have believed for years that, “Everyone working in the oil field is making $100,000 per year.”  This has never been true, and it certainly is not true now.  This belief, and the belief that “It’s starting to pick back up again” has misguided many of the people in Dickinson, causing them to make bad life decisions.

Instead of realizing that the oil boom in North Dakota was a once-in-a-lifetime, short-lived deal, most of the people in Dickinson acted like there was no end to it.  The sudden dramatic increase in local business, the sudden increase in demand for goods, services, and housing, allowed many local people to make windfall money, especially land owners and people who owned the mineral rights on land.

What did the local people in Dickinson do with their windfall money?  Most of them purchased the most expensive, over-priced, top-of-the-line pickup truck, travel trailer, UTV, toy hauler, or snow mobile.  Now, looking back on these purchases made in 2008-2014, roughly ten years later, all of these things are worth less than half of what they originally cost, and they are continuing to decline in value until they are nearly worthless.

Had the people in Dickinson known the truth, that this North Dakota oil boom would last from 2007-2015, they may not have spent their windfall money so carelessly and frivolously, and instead saved and invested their money so that it would last them for the remainder of their lives.

Another thing that happened in Dickinson during the oil boom, the housing prices doubled, then quadrupled.  A house in Dickinson that might have sold for $75,000 in 2006, the asking price in 2012-2014 might have been $300,000.  Some local people, and some out-of-state workers, bought houses in Dickinson at the peak of the oil boom real estate market.  They did this, because they believed that the oil boom would continue, they had better buy a house now, the house prices would only continue to increase.

Now that the oil boom is over in Dickinson, a house that was purchased for $300,000 in 2012-2014, it might only sell for $200,000 now, or it might not even sell at $150,000.  Most of the people in Dickinson are not making very much money now, many people have left Dickinson, and many people have job uncertainty.

Everyone in Dickinson needs to start over on assessing what reality is in Dickinson, what is going on, what is happening, what are the reasons and causes for what is happening.  In my next blog post, Part II, I will start with the basic essential businesses, services, and employees in Dickinson, that which everything else is built upon, so that people can see and understand what is happening, and what is going to happen.

Older Houses In Downtown Dickinson, North Dakota

In order to display the character of the older section of downtown Dickinson, North Dakota, I am going to show photographs of houses in several blog posts.

The oldest section of downtown Dickinson is approximately twenty blocks wide east to west, and approximately twenty blocks long north to south.

The above photograph shows an older home that is located several blocks north of the courthouse.  I would estimate that it was built between 1910 to 1935.  It is not the most fancy or ornate of the older downtown homes, but it is very typical in size, style, and appearance.  I took the photograph of this particular house, because I believe that this is an example of Colonial a.k.a. Georgian architecture, only done in a very minimal way.

(I had some difficulty in photographing homes in Dickinson.  Neighbors across the street and down the block did not like me even coming to a stop, not even having gotten my camera out yet.  I had to skip photographing some houses because there were too many people around, taking an interest in what I was doing before I even had a chance to photograph anything.  I think that next time, I should probably notify the Dickinson Police ahead of time that I will be taking photos, because I am sure the police were called.)

Nice Lower Middle Class Neighborhoods In Dickinson, North Dakota

I moved from north of Dickinson to downtown Dickinson about two months ago.  Throughout the several city block area in my neighborhood, there are a few houses and yards that are a mess, but the majority of the houses and yards are so well kept, that overall the neighborhood is pleasant and attractive.  And my neighborhood is probably a bad neighborhood in comparison to the adjacent neighborhoods.

I often criticize the local Dickinson residents for being uneducated, ignorant, hostile, hateful, unfriendly, not helpful, and uncooperative.  I am not going to take any of that back.  However, it does amaze me that these local people living in the lower middle class neighborhoods in Dickinson maintain their homes so well that the nicest looking areas in Dickinson are these vast neighborhoods in the downtown city blocks.

Although there is one corner of downtown Dickinson that has more affluent people, and this neighborhood is fairly nice, with dead-end streets, private drives, some larger yards, and even an $800,000 house with a swimming pool, this neighborhood is not as well maintained as many of the lower middle class neighborhoods in Dickinson.  This is very strange to me, and might be a unique situation found only in Dickinson.

I have thought about why this may be the case, that the lower middle class neighborhoods in Dickinson are so nice looking.  I believe that there are four main reasons.

  1. Putting aside the oil booms of the 1950s, 1978, and 2007, the growth of Dickinson has been slow and steady.  There did not occur the creation of vast new suburbs outside of Dickinson, and the abandonment of downtown Dickinson.  Downtown Dickinson has been continuously occupied, and has always been a fairly desirable location to live in, by the local residents.
  2. Putting aside the oil booms of the 1950s, 1978, and 2007, Dickinson has not been a town where many people became rich or affluent.  There were not tremendous numbers of people in Dickinson that made so much money by the time they were in their late thirties, that they needed to have a “McMansion” built.  Nor were there tremendous numbers of people that were making so much money that they looked at their first home as a “starter home”.  Now that I am writing this, I think that the fact that most home buyers in Dickinson believed that, “This is it, this is the only home we will ever have.”, made the homeowners take care of their homes.
  3. Due to the recent oil boom that occurred in 2007, home prices in Dickinson literally doubled and tripled in just a few years.  Homeowners in Dickinson that might not have even had significant pay increases in their line of work, would have had easy access to home equity loans to make home repairs, renovations, additions, and improvements.
  4. Due to the recent oil boom that occurred in 2007, many home owners in Dickinson did have significant increases in the amount of money they were earning.  With home prices literally doubling an tripling within just a few years, it would not have been appealing for local homeowners to buy a better house now that they were making more money.  It would make sense to repair, renovate, add onto, and improve the home that they already owned.  Many local residents did do this.

Not only do these lower middle class neighborhoods in Dickinson look very nice, they currently do not have very much crime in these neighborhoods, and they are fairly quiet and peaceful.

Real Estate agents and homeowners in Dickinson currently believe that their homes in these lower middle class neighborhoods are worth $225,000 to $380,000, which is ridiculous, for several reasons.  A family would have to expect to make at least $70,000 per year for the next thirty years to be able to afford that much money, which very few families can expect to do now that the oil boom is over.  There will be many houses for sale now that the oil boom is over, there are fewer jobs, and people have to leave Dickinson.  House prices will become lower, and lower, and lower.

These neighborhoods do look nice though.  Many, or most of these houses have new vehicles parked in front of them, which I think is an indication that the homeowners did well financially during this most recent oil boom, or they took out home equity loans when the housing prices doubled and tripled.

Incredible And Amazing Financial Mystery In Dickinson, North Dakota

Eventually, and I think fairly soon, one of the most incredible and amazing news stories will begin to unfold in Dickinson, North Dakota…..

Update 7/24/17:

I have removed this article for the time being.  This article was about an oil field service company in Dickinson that is having some financial difficulties and problems.

The cause of me looking into, analyzing, and writing about the company’s financial situation, was that I had not been paid money that I believe I was owed.  As of today, the company has agreed to pay me.  I do not want to make things more difficult for the owners of this company at this time, so I removed this article.

How Excessive Land Greed Has Hurt Dickinson For Ever

I wrote about “Causes And Effects Of Excessive Land Greed In Dickinson, North Dakota” in my previous two blog posts.  In many other blog posts, I have described and explained the extremely high cost of housing in western North Dakota and Dickinson that occurred during the Oil Boom from 2007 through 2014.

Both in their behavior and in their actual statements, many business owners, merchants, land owners, home owners, real estate agents, and property developers indicated that they believed the Oil Boom would continue for much longer than it did.  This belief seemed to inspire high pricing:  If you want some place to live, you better take this, the prices are only going up;  If you want some place to live, you better take this, soon there won’t be any place left;  If you want to make this money here, you better take this, it will be worth it in the long run.

The out of state workers paid very high prices for housing because they had no choice, they believed they had to take what they could get before prices went up more or somebody else took it, and they believed with a high amount of pay it would be worth it in the long run.  The out of state workers and the out of state companies hated the extremely high housing prices.  They became aware that prior to the Oil Boom, the one bedroom apartment they were now renting for $1,800 per month, had been $400 per month.  The old three bedroom house that they were now renting for $3,000 per month, had been $600 per month.

The out of state workers and out of state companies felt like they were being gouged and taken advantage of.  They felt like if they were willing to leave their homes, families, and friends and travel all this way to work in a cold and barren environment, that that overtime pay should go in their pocket, pay off all of their debts, or build their savings, not go to their local landlord, who was not making any kind of sacrifice or facing any hardship.  This bad feeling about being gouged made both the out of state workers and out of state companies have bad feelings about working in Dickinson.

But forget about bad feelings about working in Dickinson, the reality was that workers were paying $1,800 per month for a one bedroom apartment, or $3,000 per month for an old three bedroom house.  The out of state workers and out of state companies knew all along that they could never afford to stay in Dickinson if the high paying work went away.

But it did not have to be this way.  There are hundreds of miles of barren, desolate, vacant, unoccupied grass lands stretching in every direction outside of Dickinson.  More vacant unoccupied land than almost any other place in the United States.  In other states, I have seen 1\4 acre lots in completed developments for $25,000.  To put a new manufactured home on one of these lots would have cost an additional $80,000 to $100,000.  To put a conventional home on one of these lots would have cost an additional $125,000 to $150,000.  These types of new homes would have had mortgages of less than $1,500 per month.

Everything could have turned out differently for Dickinson, North Dakota.  If Dickinson would have had new manufactured homes or new conventional homes with mortgages of $2,000 per month, thousands of skilled workers and trades people would have made Dickinson their permanent home, and out of state companies would have relocated operations here.

The truck drivers, welders, pipe fitters, heavy equipment operators, plumbers, and electricians, they are always having to travel out of state to work on big projects, no matter where they live.  If they would have come to Dickinson, expecting that they were going to be here for at least several years, they would have happily and gladly bought a home for $2,000 per month.  They had the income and job security to do it, and they would be owning something.  They wouldn’t have had any hesitation, if the oil field work went away, they could work other big projects in other states, they always had.

If Dickinson had had these new affordable homes, many trades people would have been able to pay them off in ten years if they had a wife who also worked, or room mates.  There could have been vast neighborhoods of new homes with so much equity in them, that the owners were not about to walk away from them or fail to pay their property taxes.  The workers would have had more disposable income and a place to park boats, motorcycles, ATVs, snow mobiles, and campers. Once workers get equity in a home, all the toys they want, their wife and kids, they are stuck, that is their home.  If money problems come up, then the worker has to travel out of state and send money back home.

I don’t know if any one in Dickinson ever realized, that the excessive land greed in Dickinson, where land owners would not sell vacant grass land for less than $100,000 per acre, resulted in and will result in Dickinson losing most of its workers, and causing land to be worth about $1,000 per acre because no one wants to live here.  You’ll see.